China sources fresh milk from Tasmania

Posted on 31/10/16 in Business Consulting, Company News, Uncategorised, No Comments

Businessman Lu Xianfeng is planning to fly fresh milk to his home city of Ningbo, in eastern China, from Tasmania. Lu owns Australia’s largest dairy operation from the island state, Moon Lake Investments Pty bought the 191-year-old Van Diemen’s Land Co. for $214 million (A$280 million) in March, giving him access to 25 dairy farms and enough fresh milk to fill an Olympic-size swimming pool every nine days.

Moon Lake’s managing director told reporters that a share of that milk will be flown to Ningbo every week from Hobart, where the China-bound bulk deliveries will come from. The volume of fresh milk shipments to the world’s most-populous nation has jumped an average of 126% a year since 2010, creating a $333 million market dominated by the EU, according to Chinese customs data.

The US Department of Agriculture confirms in May that Chinese consumers, ruffled by past food scandals, see imported milk as a safer alternative to domestic food supplies. Moon Lake has already forward-sold more than $2.2 million (15 million yuan) of milk from its Van Diemen’s Land dairies, which it calls VDL Farms.

About 10 million liters of milk a year from VDL dairies will be trucked to Hobart for processing by Lion Dairy and packaged under the “VAN Milk” brand, a nod to the dairy operation’s ties to Van Diemen’s Land Co., according to the statement. Moon Lake is aiming for the premium end of the market, with the milk to sell for between A$10 and A$15 a liter ($29-to-$44 a gallon).

The milk exports will be a boost for Tasmania, Australia’s smallest and least-populated state, where an unemployment rate of 6.5% lags the national rate of 5.6%, and its citizens are more dependent on welfare than in any other state.


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